Google takes targeted approach

15 February 2012

MOUNTAIN VIEW: Google, the online giant, is taking a more focused approach to its future expansion, targeting a smaller number of areas, including social networking and web video.

The Silicon Valley-based firm, active in sectors from search to social networking and mobile, has made 120 purchases in its history to date, most notably YouTube, the video-sharing site, and DoubleClick, the advertising services provider.

Many of the remaining acquisitions have been comparatively modest, and Google has also recently begun to rationalise its product portfolio to hone in on a tighter group of potentially lucrative categories.

David Lawee, Google's head of corporate development, told the Financial Times its previous tactics reflected the "20% time" model allowing staff to devote working hours to individual company projects.

"It did feel a little more scattered," he said. "I wasn't as sure of the full range of things."

The purchases of Next New Networks, a production company, and Widevine, a digital copyright protection business, are examples of increasingly strategic planning, as they offer clear benefits for YouTube.

"We think there will be tens of billions of dollars of value created by companies that are built on the YouTube ecosystem," said Lawee. "Anything we can do to accelerate that is in our interests."

However, social networking is unlikely to witness any such activity, given that Google+, which currently has some 90m users, is following a "pretty good trajectory".

"It looks now as though that's something we build internally," Lawee said.

Among the challenges for technology companies of all kinds is the risk of a price bubble on possible acquisitions, both due to competition between firms like Apple and Facebook, and inflated market rates.

"It's not clear what's overvalued and what isn't," Lawee said. "We believe we have a huge opportunity before us."

Another change implemented at Google since Larry Page took over as chief executive, is an in-house aim to prioritise quick, entrepreneurial decision-making, such as by holding evening meetings from 6pm to 11pm.

Data sourced from Financial Times; additional content by Warc staff